Govt broke procurement laws to hand- pick special forensic auditors

…paid 18 consultants 5.5M, still to hand out .2M – Sharma

The new Government, when it came to office in May 2015, announced a litany of special forensic audits into several governmental agencies suspected of being engaged in corrupt practices, but in doing so the coalition A Partnership for National Unity/Alliance For Change (APNU/AFC) Administration breached the nation’s procurement laws in order to hand-pick its special auditors.

The breach of the Procurement Act by the Finance Ministry has since been flagged by Auditor General Deodat Sharma in his 2015 annual report on the nation’s accounts.
Sharma, in his report, documents that the Ministry awarded 45 contracts totalling $135.576 million to conduct forensic audits of various entities.
According to documentation seen, the Ministry sought permission for single source procurement in accordance with Section 28(b) of the Procurement Act from the Chairman of the National Procurement and Tender Administration Board (NPTAB) which was given.
The Auditor General has since had cause to point out, however, that the term “single source procurement” was not stated in any of the approvals by the NPTAB.
Sharma noted that the Procurement Act states that the procuring entity may engage in single source procurement when the services by reason of their highly complex or specialised nature are available from only one source.
According to Sharma, “since the Ministry awarded 45 contracts to 18 consultants, including accounting firms, then the single source method of procurement should not have been used for the award of these contracts”.
The Auditor General has since also had cause to point out that it was also observed that at the time of reporting in September 2016, nine cheques totalling $26.194 million were still on hand.
The largest of the outstanding payments is an $8 million cheque for the audit that was undertaken at the Georgetown Public Hospital Corporation (GPHC).
Among the outstanding payments also is a $4.5 million cheque for the audit conducted on the Guyana Geology and Mines Commission (GGMC), in addition to similar payments for audits conducted on the Petrocaribe Fund, GO-Invest, the National Sports Commission and the Central Housing and Planning Authority.
The Ministry had advised the reports related to the outstanding payments were currently with the Ministry pending due diligence checks before the payments were made.
The Finance Ministry was also flagged by the Auditor General over several other breaches of the nation’s procurement laws, including the continued abuse of the Contingency Fund, a sub-fund of the treasury meant to meet emergency expenditure.
It was found that during the course of 2015, the APNU/AFC Government abused the Contingency Fund through a total of 11 advances, for which the requisite laws did not cater.
According to Auditor General Sharma, the 11 advances used to abuse the Contingency Fund amounted to more than $600 million, with the Guyana Defence Force (GDF) being the biggest recipient of almost $300 million.
The Auditor General also found that the expenditure of Government was in fact overstated by more than $2.5 billion in respect of 16 Ministries owing to breaches of the Fiscal Management and Accountability Act.
With regard to the Procurement Act, the Auditor General found that 11 Ministries had breached the laws with respect to the appointment of regional tender boards and the basis of awards of contracts, among other breaches.
The Auditor General’s report also observed that more than 50 per cent of that agency’s recommendations to stem the repeated violations had not been implemented.
“Overall, I am concerned with the lack of action towards the implementation of these recommendations, since 56 per cent of the recommendations have not yet been implemented,” the AG noted.
Sharma, in his 2015 Audit Report, observed too that “in many instances, recommendations are repeated each year without any appropriate action and as a result, weaknesses and issues that impacted negatively on Government’s governance and accountability mechanisms continue to occur.”